Manus Island security contractor rejects corruption claims

The little-known security company at the centre of a $423 million Manus Island contracting controversy has broken its silence to reject suggestions of improper payments or bad debts.

After enduring intense media and parliamentary scrutiny, Paladin director Ian Stewart uploaded a statement to the company’s website on Wednesday night strongly defending its record and hitting out at claims of corruption.

“We do not (have) any bad debts or failed contracts. We do not make payments that are not linked to a service. We reject the notion in the media that any contract with a Papua New Guinea entity is tainted by corruption,” Mr Stewart said.

Asylum seekers at the Oscar compound in the Manus Island detention centre, Papua New Guinea.Credit:AAP

Officials from the Home Affairs department have been under increasing pressure in Senate estimates this week to explain the circumstances that led to Paladin being awarded $423 million worth of contracts in non-competitive tender processes.

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Labor has called for an investigation into the awarding of contracts to Paladin. Home Affairs has been reluctant to go into details about the contracts for fear of upsetting PNG, whose support Australia needs to continue its offshore processing policy.

The Age and The Sydney Morning Herald revealed on Monday that Home Affairs was in a rush to find a Manus Island security contractor in August 2017 after an earlier tender process run by the PNG government suddenly collapsed.

This meant Paladin, which had been working as a sub-contractor to previous Manus Island contract holder, Broadspectrum, was approached to submit a bid for garrison support work at three refugee camps. It was given just six days to cost and submit its bid.

Consulting giant KPMG oversaw the process that led to Paladin being contracted.

Concerns have been raised about how a company with an obscure background and limited working capital could have been engaged by Home Affairs for such a big job.

But Home Affairs officials and Minister Peter Dutton have countered that the government had few alternatives after bigger-name companies were reluctant to be involved in security work on Manus Island after refugee advocates ran a successful campaign against the ASX-listed prior contractor, Broadspectrum.

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Until now, Paladin’s policy has been to refer all inquiries about its Manus Island work to Home Affairs. Home Affairs has also been reluctant to answer questions, largely on the basis revealing further information about the Manus Island contracts could damage relations with PNG.

Mr Stewart said Paladin reiterated a recent statement by the speaker of the PNG Parliament, Job Pomat, in which the MP declared he was not a party to any Paladin business or that of its sub-contractors or partners, including one company which bears his family name.

One sub-contractor, Peren Investments Limited, was a company that represents the “traditional custom landowners” for the site of the East Lorengau transition centre on Manus Island, according to Mr Stewart.

Mr Pomat comes from a ruling family on Manus Island.

The PNG government has been increasingly pushing Home Affairs and its contractors to ensure local businesses get a meaningful slice of the massive offshore detention contracts.

Buildings at the East Lorengau Refugee Transit Centre and West Lorengau Haus on Manus Island.
Photo: Australian Department of Immigration and Border Protection

Paladin has previously had trouble getting visas for its staff amid PNG concerns locals were being shut out of work.

“We are proud of what can be achieved when working with local communities and we employ over 98 per cent PNG nationals across our workforces,” Mr Stewart said.

Estimates hearings this week revealed that Home Affairs asked Paladin founder Craig Thrupp to stand down as chief executive of the company after PNG refused to grant him a visa to re-enter the country.

Neither Home Affairs nor Paladin has explained the reasons as to why Mr Thrupp was refused a visa.

PNG has proven an extremely difficult operating environment for foreign companies, due to tensions created by fierce domestic political rivalries and improper demands for payments that could be considered corrupt.

Despite all the controversy surrounding Paladin, Home Affairs officials told estimates this week they were “quite happy” with the company’s performance.